Developments in residential property prices last month provide further evidence that the market is rising slowly, having reached a floor.

Compared with June, prices rose 1.2 per cent nationally in July, according to data published yesterday by the Central Statistics Office (CSO). This was one of the largest monthly increases since the market slumped in 2007 and the fourth consecutive month in which prices rose.

The steep, uninterrupted declines in national prices in the post-crash era ended quite abruptly in early 2012. The period of broad price stability over the past 18 months followed a halving of prices in the 2007-2012 period.

There are, however, some concerns about the reliability of CSO data owing to the limited scope of its coverage. It excludes properties purchased without mortgage financing, which are currently estimated to account for about half of all transactions. That said, all other evidence points to a broad stabilisation of prices.

While the early 2012 inflection point was to be seen in all segments of the market – both geographically and by type of residential property – developments over the past 18 months have been somewhat different in the capital compared to the rest of the country.

This trend continued in July and was, if anything, more pronounced.

While prices outside the capital were essentially unchanged on June, in Dublin they jumped by 3.3 per cent. The increase was the largest on record, exceeding even the biggest monthly increases in the 2005 and 2006 period.

Since reaching their post-crash low-point in August last year, prices in the capital were 8.6 per cent higher by last month.

Rebound
The rebound in Dublin since early last year has been driven by both houses and apartments. However, July saw sharply different developments on a month-on-month basis.

While house prices jumped 3.6 per cent in June (the largest increase since the CSO began compiling the series in 2005), apartment prices declined 2.3 per cent.

The CSO explicitly warned against reading too much into the monthly apartment-price data owing to the small number of transactions in that segment of the market. Over a longer time frame, apartment prices in the capital have been recovering since their low point last November. In July, they were up 12.5 per cent on eight months earlier.

Prices outside the capital have recovered far less from their more recent nadir than Dublin prices. Their low point was reached in March of this year. As of July, they were a mere 2 per cent off bottom.

While the CSO does not publish a series on apartment prices outside the capital, the figures suggest they have experienced the weakest recovery of any segment of the market.